Part-Time Diamond DiggersJuly 30, 20
One diamond can be a life changer. Just ask Anandilal Kushwaha.
He's a farm laborer in the Indian state of Madhya Pradesh, who has little knowledge or experience of the diamond world.
But he speculated $2.70 for the rights to dig a 25ft by 25ft patch of land near his home, and he had the good fortune to unearth a 10.69-carat diamond.
Press reports give no details of color or clarity, but do suggest that it could fetch $67,000, which would be a remarkable return on a modest investment.
India had a near-monopoly on diamond mining until the early 1700s and was famed for its Goloconda mines, which produced diamonds of remarkable quality, whiteness and clarity. There's virtually no commercial mining any more in India, except for the Majhgawan mine, near the town of Panna, in Madhya Pradesh - and the nearby artisanal mines, such as Mr Kushwaha's.
The local government leases plots to local people who wash the gravel for diamonds, and occasionally get lucky.
Mr Kushwaha had recruited fellow workers to help, and will split the proceeds with them after the district office sells the stone and takes it ryalty nd 11.5 per cent tax.
It's all a far cry from the vast Aikhal or Udachny in Russia or Jwaneng in Botswana - the world's biggest diamond mines.
But it's not the only option for non-professionals to dig their own diamonds. The Crater of Diamonds State Park, near Murfreesboro, in Arkansas, USA, is a one-of-a-kind visitor attraction on the site of a disused mine, where day-trippers sift the soil for gems.
It's a magnet for families, who can also swim in the water park and stay the night at the campsite, but it's also the source of some impressive finds, among them some rare natural color diamonds.
In 1990 a visitor unearthed a colorless, internally-flawless 3.09-carat diamond which the park bought for $34,700. Earlier this month a woman called Mindy Pomtree found a 6.39 carat diamond on a visit to the park - not a bad reward for the $10 adult entrance fee.
And in June a Beatrice Watkins found a 2.23-carat brown diamond after just 30 minutes of digging.
Since the park opened in 1972, over 75,000 diamonds have been unearthed.
Among them is Uncle Sam, a 40.23-carat white diamond with a pink cast. It is the largest diamond ever discovered in the United States and is likely to remain so for a long while, given that there are no other active diamond mines in the country.
It strikes me that these two countries, India and the USA, are by far the biggest manufacturers and consumers respectively of diamonds worldwide, yet neither have any professional mining activity to speak of.
Which brings me to De Beers. I remember when I was just a small boy that my dad explained to me how they sold diamonds. Buyers are offered a box of diamonds for a fixed price, he told me, and they take it or leave it. I was puzzled at the time. I now have a slightly more nuanced understanding of the process and so I was interested to see CEO Bruce Cleaver's announcement this week that everything De Beers does is now under scrutiny, prompted in part by the COVID-19 pandemic, And he didn't rule out its iconic Sights.
The six-weekly sales represent the vast majority of De Beers' output from its mines across Botswana, South Africa, Canada and Namibia. In non-corona times the 80 or so Sight holders fly to Bostswana to inspect their aggregated box of goods, in accordance with their pre-agreed Intention to Offer, specifying volume and type. There are options to arrange deferrals or buybacks, nut in essence it's not so different from the way my dad described it.
Sights have bene credited with stabilizing the markets. One complaint I've heard is that there should be a more managed distribution system to ensure the right goods reach the right holder and I'm sure there are others.
De Beers has, like all miners, been struggling with the lockdowns, travel restrictions and rock-bottom demand. It saw Q2 sales fall 96 per cent to $56m. Sight 3, in March, was canceled and Sight 4, in May, realized just $35m (the equivalent sale last year brought in $416m). Maybe the time has come to tinker with an icon.
Have a fabulous weekend